Trump's oil and gas friendly energy secretary pick seen as 'fantastic' in Middle East

        US President-elect Donald Trump's selection of oil industry veteran Chris Wright as energy secretary will likely be welcome in the Middle East where hydrocarbons dominate its economies, with one Saudi government official describing the nomination to S&P Global Commodity Insights on condition of anonymity as "fantastic."

        However, if US oil production increases under the Trump administration, that could complicate the OPEC+ alliance's desire to raise its own output without causing a sell-off in prices, said Kamil al-Harami, an independent oil analyst and former executive for state-owned Kuwait Petroleum Corp.

        "Overall, more crude production will lower prices [and] may lead to further weakening of OPEC," Harami said.Wright, whose nomination to head the Department of Energy was widely reported Nov. 16 in the midst of the COP29 UN climate change summit, is CEO of oilfield services firm Liberty Energy, which has extensive operations in hydraulic fracturing. He is a climate change skeptic who has called net-zero plans "sinister."

        "Chris Wright is a tremendous pick for energy secretary but also for advancing a rational global dialogue on energy," Joseph McMonigle, secretary general of the Riyadh-based International Energy Forum, told Commodity Insights on Nov. 17. "His views and President Trump’s views are aligned on energy and transition policies. I expect we will see more cooperation on CCUS (carbon capture, utilization and storage) and other circular carbon economy technologies and big focus on energy access and affordability."

        If confirmed by the US Senate, he would succeed Jennifer Granholm, who told reporters at COP29 in Azerbaijan that she was hopeful that EV tax credits and other energy transition measures would remain intact under the new administration.

The energy secretary role is not directly involved with regulating US oil and gas production, though it is in charge of managing the Strategic Petroleum Reserve and issuing authorizations for LNG exports. The Energy Information Administration, a statistical agency whose regular market outlooks can influence oil and gas prices, in addition to policy, also falls within the US Department of Energy's purview.

        "Wright’s role will be to support the domestic energy sector, which will have an indirect impact on US shale producers’ abilities to undermine OPEC’s market management strategies and tactics," said Niamh McBurney, associate director for the Middle East and North Africa at risk consultancy firm Control Risks.

        She added that should Wright be open to further investment from Middle Eastern national oil companies in the US energy production and exports, it could benefit those companies considerably. The UAE's Abu Dhabi National Oil made its first investment in the US in May.Wright's selection came a day after Trump named his Interior secretary pick, North Dakota Gov. Doug Burgum, as head of a new National Energy Council aimed at boosting US energy production.

        Wright is largely expected to defend fossil fuel use and maximize oil and gas production while finding ways to boost electricity generation as demand rises.Rachel Ziemba, geopolitical and macro-risk analyst and founder of Ziemba Insights, said Wright is unlikely to have much to do with Middle Eastern producers as his focus will be on natural gas compressor domestic energy policy, but expects regional petrostates will be "cautiously optimistic" about the pick."Wright is someone that understands the industry and is aligned with their views that fossil fuel energy is a key part of energy mix," Ziemba said.

        She noted he has experience in the shale patch, where the industry has become more efficient."The US administration will be focused on domestic energy production and growing US market share, so some of the positives about a shift from decarbonization rhetoric may be offset by an America first focus," she said. "Nonetheless, I think [Middle East producers] will be glad to see and work with the industry expertise in Washington."